About

Bank

Finance is the lifeblood of trade, commerce and industry. Now days, banking sector acts as the backbone of modern business. Development any country mainly depends upon the banking system.

MODERN BANKING: -
The banking, which was known in various forms and guises in
The ancient civilization in various parts of the world did not Coincide with the emergence of the modern Banks. The
Banking which had its roots in the flourished culture and had Lost its required effectiveness regained the strength with the Development the modern banking.

History of banking sector in Pakistan: - Prior to partition in 1947, branches of British banks dominated banking in Pakistan. The state Bank of Pakistan, the central bank, was formed after partition in 1948. It assumed the supervisory and monetary policy powers of the state Bank of India. In the period of 60s to 70s the emergence of a number of specialized development finance institutions (Defies) such as industrial Development Bank of Pakistan (IDBP) and the agricultural development bank (ADB). These DFIs were either controlled directly by the state or through the SBP, and were intended to concentrate on specific priority sector lending. In 1947 the Government nationalized all domestic commercial banks. The Pakistan Banking council was established, which assumed the role of a banking holding company but with limited supervisory powers. However, PBC was dissolved in 1977, leaving the SBP as the sole regulatory authority for banks and...

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...1. Introduction
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...KEYSTONE BANK
Strengths:
Keystone has a few strengths looking at its present financial condition financial statements. However, the bank is willing and able to pay higher competitive rates compared to other banks in the area. This is likely to send a strong signal to potential customers who may wish to take advantage of the rates by increasing their core deposits at Keystone Bank. Also, increasing local economic activities can also be viewed as strength to keystone. This is because if the local people are making more money than they need, they will be willing to save some especially at high rates of return which would benefit them and Keystone at the same time. It will increase their core deposits and decrease their dependence on other sources for loanable funds.
Commercial and consumer loans are also strength of keystone looking at the two year period compared to their peers. They need to capitalize on that and see if they offer some commercial loans to the new company’s coming into town at competitive rates.
Weakness:
Keystone Bank has a wide range of weaknesses compared to its peers. Some of their weaknesses are a result of their high exposure to credit risk, interest rate risk and liquidity risk. Credit risk can be defines as the risk of a corporation not being able to pay its debt as they become due. Keystone has a lot of CD’s on its books and need to pay the holders of the CD as they...

...Deregulation of Banks Caused the Great Recession
The recession of 2008, which we are only just starting to come out of, happened as a result of a few major factors. The primary factor was the deregulation of banks during the Bush administration. Another factor was that banks offered loans without looking into the financial stability of borrowers or businesses. Also, credit unions, savings and loans, and banks entered into competition with each other. The Security and Exchange Commission, S.E.C., reduced requirements so that banks could pile up debts.
Banks first became regulated in the 1930 when Franklin D. Roosevelt became president. When Roosevelt became president, “the fed government intervened deeply into the ‘banking business,’ which was defined by the IRS, FDIC, Comptroller of the Currency, SEC (if public-owned), and State Bank Supervisors etc. By defining what the ‘business of banking’s was the statutes, regulations, and enforcement personnel administering these laws, bankers were boxed into doing business as defined by state and federal governments.” (Ritholtz) Between the 1930s and 1969, two successful banks were prohibited from merging together. The only time that two banks could merge, is if one successful bank were to absorb an unsuccessful or failing bank.
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...people deposit money in a saving account in bank for example; the bank must invest the money in new factories and equipments to increase their production. In addition borrowing from the banks most issues stocks and bonks that they sell to investors to raise capital needed for business expansion. Government also issues bonds to obtain funds to invest in such project such as the construction of dams, roads and schools. All such investments by individuals business and government involves a presto sacrifice of income to get an expected future benefits. As a result, investment raises a nation’s standard of living.
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...intermediary is a bank that consolidates deposits and uses the funds to transform them into loans.
Through the process of financial intermediation, certain assets or liabilities are transformed into different assets or liabilities. As such, financial intermediaries channel funds from people who have extra money or surplus savings (savers) to those who do not have enough money to carry out a desired activity (borrowers).
A financial intermediary is typically an institution that facilitates the channeling of funds between lenders and borrowers indirectly. That is, savers (lenders) give funds to an intermediary institution (such as a bank), and that institution gives those funds to spenders (borrowers). This may be in the form of loans or mortgages. Alternatively, they may lend the money directly via the financial markets, which is known as financial disintermediation.
In the context of climate finance and development, financial intermediaries generally refer to private sector intermediaries, such as banks, private equity, venture capital funds, leasing companies, insurance and pension funds, and micro-credit providers. Increasingly, international financial institutions provide funding via companies in the financial sector, rather than directly financing projects.
Functions performed by financial intermediaries
Financial intermediaries provide three major functions:
1. Maturity transformation. Converting short-term liabilities...